Leaders of the euro zone countries will hold a financial crisis summit in Paris on Sunday to "define a joint action plan for the euro zone and the European Central Bank," the French presidency said.

PARIS - Leaders of the euro zone countries will meet in Paris on Sunday in Europe's latest attempt to find a joint response to the financial crisis that has sent global markets into a tailspin.

EU heads of state and government are due to hold a regular summit in Brussels on Oct. 15, but the speed and ferocity of this week's turbulence has piled pressure on European leaders to come up with a convincing rescue plan for their banks.

France holds the rotating European Union presidency and French President Nicolas Sarkozy's office said in a statement the Eurogroup leaders would seek to draw up an action plan with the European Central Bank to tackle the crisis.

The Eurogroup unites 15 EU nations that have adopted the euro currency, including Germany, France, Italy and Spain. Britain, which has been especially hard hit by the crisis, is not a member.

France said ECB president Jean Claude Trichet and European Commission President Jose Manuel Barroso would also be in Paris for Sunday's meeting, which will start at 5 p.m. (1500 GMT)

Highlighting the urgent need for solutions, Europe's major markets slumped for a fifth straight day, with the FTSEurofirst 300 index of top European shares falling 7.8 percent on Friday to end the week down 22 percent -- its worst ever performance.

Europe's response to the month-long mayhem has been patchy and improvised, with various governments rushing to put out fires in their own countries rather than work on a trans-national plan for their interconnected economies.

"The stock markets are currently in the grip of panic and madness," Italian Prime Minister Silvio Berlusconi told reporters in Naples, adding that world leaders were considering drawing up new rules for global finance.

"We will have to come up with something. I think that we will have to rewrite the rulebooks," he said.

Finance ministers and central bankers from the Group of Seven met in Washington after joint interest-rate cuts, a $700 billion U.S. bailout and individual government plans to take equity stakes in various banks failed to restore confidence.

"We now need quick and resolute actions ... Not to act is no alternative," said Axel Weber, a governing council member of the European Central Bank.

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Sarkozy called together the heads of Italy, Germany and Britain last weekend for emergency talks, but they failed to produce any concrete results or halt the market slump.

Spain was not invited to the meeting and Spanish Prime Minister Jose Luis Rodriguez Zapatero told Sarkozy on Friday it was time for Eurogroup leaders to hold emergency talks.

"There are no precedents for a situation in the international financial system characterised by a profound lack of confidence and the inability of the credit markets to function," Zapatero told reporters.

France last week proposed creating a pan-European emergency fund to prop up the sinking banking sector, but the idea was torpedoed by Germany, afraid that it would be called on to provide the lion's share of cash.

On Friday, Die Welt newspaper said the German government was working on a British-style rescue plan for its financial sector which could involve guarantees of over 100 billion euros ($137 billion) and a large capital injection.

A coalition party source confirmed the report although Chancellor Angela Merkel's spokesman Ulrich Wilhelm said a decision had yet to be made.

Britain's plan involves injecting 50 billion pounds ($87 billion) of taxpayers' money into its banks and to guarantee interbank lending -- a move it urged other countries to adopt to try to get the stalled banking system pumping again.